nep-res New Economics Papers
on Resource Economics
Issue of 2012‒07‒23
nine papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Tipping Points and Ambiguity in the Economics of Climate Change By Derek M. Lemoine; Christian P. Traeger
  2. Climate Change Mitigation and Green Growth in Developing Asia By Howes, Stephen; Wyrwoll, Paul
  3. Rethinking Environmental Federalism in a Warming World By Shobe, William M.; Burtraw, Dallas
  4. Environmental Regulation, Pollution and the Informal Economy By Ceyhun Elgin; Ummad Mazhar
  5. Secular Trends, Environmental Regulation, and Electricity Markets By Burtraw, Dallas; Palmer, Karen; Paul, Anthony; Woerman, Matt
  6. Payments for Environmental Services: A Peruvian Case Study By Rojas Lara, Teresa
  7. Environmental Compliance and Human Capital: Evidence from Chinese Industrial Firms By Jing Lan; Alistair Munro
  8. Ecological Economics By David Stern
  9. Green Growth and Equity in the Context of Climate Change: Some Considerations By Sachs, Jeffrey D.; Someshwar, Shiv

  1. By: Derek M. Lemoine; Christian P. Traeger
    Abstract: We model welfare-maximizing policy in an infinite-horizon setting when the probability of a tipping point, the welfare change due to a tipping point, and knowledge about a tipping point's trigger all depend on the policy path. Analytic results demonstrate how optimal policy depends on the ability to affect both the probability of a tipping point and also welfare in a post-threshold world. Simulations with a numerical climate-economy model show that possible tipping points in the climate system increase the optimal near-term carbon tax by up to 45% in base case specifications. The resulting policy paths lower peak warming by up to 0.5°C compared to a model without possible tipping points. Different types of tipping points have qualitatively different effects on policy, demonstrating the importance of explicitly modeling tipping points' effects on system dynamics. Aversion to ambiguity in the threshold's distribution can amplify or dampen the effect of tipping points on optimal policy, but in our numerical model, ambiguity aversion increases the optimal carbon tax.
    JEL: C61 D81 D90 Q54
    Date: 2012–07
  2. By: Howes, Stephen (Asian Development Bank Institute); Wyrwoll, Paul (Asian Development Bank Institute)
    Abstract: Developing Asia is the driver of today’s emissions intensive global economy. As the principle source of future emissions, the region is critical to the task of global climate change mitigation. Reflecting this global reality and a range of related domestic issues, the governments of the People’s Republic of China, India, Indonesia, Thailand, and Viet Nam have embarked upon an ambitious policy agenda. This report reviews the present and future policy settings for climate change mitigation and green growth in Asia’s major emerging economies.
    Keywords: global climate change; developing asia; green growth; asia emerging economies
    JEL: O10 O44 Q40 Q42 Q53 Q54 Q56 Q58
    Date: 2012–07–11
  3. By: Shobe, William M.; Burtraw, Dallas (Resources for the Future)
    Abstract: Climate change policy analysis has focused almost exclusively on national policy and even on harmonizing climate policies across countries, implicitly assuming that harmonization of climate policies at the subnational level would be mandated or guaranteed. We argue that the design and implementation of climate policy in a federal union will diverge in important ways from policy design in a unitary government. National climate policies built on the assumption of a unitary model of governance are unlikely to achieve the expected outcome because of interactions with policy choices made at the subnational level. In a federal system, the information and incentives generated by a national policy must pass through various levels of subnational fiscal and regulatory policy. Effective policy design must recognize both the constraints and the opportunities presented by a federal structure of government. Furthermore, policies that take advantage of the federal structure of government can improve climate governance outcomes.
    Keywords: climate change, subsidiarity, states, federalism, climate governance
    JEL: Q54 Q58 H7
    Date: 2012–01–27
  4. By: Ceyhun Elgin; Ummad Mazhar
    Date: 2012–07
  5. By: Burtraw, Dallas (Resources for the Future); Palmer, Karen (Resources for the Future); Paul, Anthony (Resources for the Future); Woerman, Matt (Resources for the Future)
    Abstract: The confluence of several pending environmental rulemakings will require billions of dollars of investment across the industry and changes in the operation of facilities. These changes may lead to retirement of some facilities, and there has been much debate about their potential effects on electricity reliability. Only very exceptional circumstances would trigger supply disruptions; however, the changes may affect electricity prices, the generation mix, and industry revenues. Coincident with these new rules, expectations about natural gas prices and future electricity demand growth are changing in ways that also will have substantial effects on the industry. This paper addresses these two sets of issues using a detailed simulation model of the U.S. electricity market. The findings suggest that recent downward adjustments in natural gas prices and electricty demand projections have a substantially larger impact on electricity prices and generation mix than do the new environmental rules.
    Keywords: air pollution, electricity, regulation, equilibrium model
    JEL: Q41 Q52 Q58
    Date: 2012–03–22
  6. By: Rojas Lara, Teresa
    Abstract: Globally, land use changes and deforestation contribute with around 20% of the green house gases emissions. Payments for Environmental Services (PES) schemes constitute a way to cope with these problems and promote the conservation of natural resources using market-based incentives. Through empirical evidence from Peru, this study assesses the impact of payments for carbon reductions and analyzes factors which can contribute to the adoption of these projects. Household behavior is analyzed with a linear programming model. The preliminary results indicate that carbon payments would increase the income of the farmers, thus could contribute to increase the adoption of these projects.
    Keywords: Climate Change, Peru, Payments for Environmental Services (PES), Mathematical Programming, Agricultural and Food Policy, Environmental Economics and Policy,
    Date: 2012
  7. By: Jing Lan (National Graduate Institute for Policy Studies); Alistair Munro (National Graduate Institute for Policy Studies)
    Abstract: By using a unique cross-sectional dataset of Chinese industrial firms, this paper investigates the external and internal effects of human capital on firms’ environmental performance. The result shows that firms have better environmental compliance because they are ‘pushed’ into making compliance decision by internal driver of human capital and ‘pulled’ to be environmental friendly by external force of social human capital stock. This finding is robust when we take into account of possible endogeneity of human capital. In addition, evidence from this study suggests that the situation of weak implementation of environmental supervision and evasion of environmental monitoring could be reconciled by internal and external effects of human capital.
    Date: 2012–07
  8. By: David Stern (The Australian National University (ANU) - Crawford School of Public Policy)
    Abstract: Ecological economics is a relatively new interdisciplinary field concerned with the relationship between economic systems and the biological and physical world. This article covers the following topics: A discussion of views on whether ecological economics is just a field or approach within economics or a new ÒtransdisciplinaryÓ field in its own right; Origin of the name of the field; Core common principles of ecological economics; Comparison with environmental economics; Applications; History and institutions of ecological economics. The core principles are that the economy is embedded and dependent upon the ecosphere and that, therefore, models of the economy have to comply with biophysical principles. Ecological economists believe that there are limits to our ability to substitute human-made inputs and knowledge for natural resources and the environment in both production and consumption. They also argue that economic policy must consider jointly the objectives of economic efficiency, equity, and sustainability.
    JEL: Q57
    Date: 2012–05
  9. By: Sachs, Jeffrey D. (Asian Development Bank Institute); Someshwar, Shiv (Asian Development Bank Institute)
    Abstract: The authors set out to explore some of the ways that equity has been considered in climate change discussions. They discuss per capita emission right approaches, and highlight key challenges in the application of equity in global climate change negotiations. They provide a brief overview of key approaches to carbon financing, focusing on some recent cost estimations of potential climate change impacts, as well as of projected needs for green growth programs. The diversity of estimates and present evidence on the apparent gulf between available public financing and green growth needs are highlighted; and considerations of implementing green growth, focusing on building climate resilience and responding to climate shocks are discussed.
    Keywords: green growth; climate change; carbon financing; climate shocks
    JEL: Q20 Q50
    Date: 2012–07–17

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